Coles Group Ltd (ASX: COL) shares are a popular option for investors.
Unfortunately, though, the supermarket giant hasn't been a great investment over the last 12 months.
During this time, the Coles share price has lost approximately 7% of its value.
This compares unfavourably to an 8% gain by the ASX 200 index over the same period.
But could things be different over the next 12 months? Let's see what a $10,000 investment in the company's shares could become.
$10,000 invested in Coles shares
With the Coles share price currently fetching $17.20, if you were to invest $10,000 (and a further $10.40), you would end up owning 582 units.
According to a recent note out of Morgans, its analysts think these units could be worth a lot more than you paid for them.
The broker currently has an add rating and $18.95 price target on Coles' shares, which implies potential upside of 10.2% from current levels.
This means that if your shares were to rise to this level, they would have a market value of $11,028.90.
Commenting on its bullish view on the stock, the broker said:
In our view, the ongoing scrutiny on the supermarkets has affected short term sentiment in the sector, which we believe creates a good buying opportunity in COL. While Liquor sales remain soft, we expect the core Supermarkets division (~92% of earnings) to continue to be supported by further improvement in product availability, reduction in total loss, greater in-home consumption due to cost-of-living pressures, and population growth.
Don't forget the dividends
The supermarket giant shares a decent portion of its profits each with its shareholders in the form of dividends. Morgans expects this trend to continue for the foreseeable future.
The broker is forecasting fully franked dividends of 66 cents per share in FY 2024 and then 69 cents per share in FY 2025. Based on its current share price, this will mean dividend yields of 3.8% and 4%, respectively, for investors.
If you assume this means a final dividend of 30 cents per share for FY 2024 and an interim dividend of 38 cents per share for FY 2025, this will lead to total dividends of 68 cents per share over the next 12 months.
This means that your 582 Coles shares will pay out fully franked dividends of $395.76 if Morgans' estimates prove accurate.
Combined with its capital gains, this boosts the value of your investment to $11,424.66, which represents a total return of approximately 14.1%.
